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Poe Company is considering the purchase of new equipment costing $87, 500. The projected net cash flows are $42, 500 for the first two years
Poe Company is considering the purchase of new equipment costing $87, 500. The projected net cash flows are $42, 500 for the first two years and $37, 500 for years three and four. The revenue is to be received at the end of each year. The machine has a useful life of 4 years and no salvage value. Poe requires a 10% return on its investments. The present value of an annuity of 1 and present value of an annuity for different periods is presented below. Compute the net present value of the machine. $(32,005). $(18, 479). $32,005. $18, 479. $40, 049
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